The real reasons why the Federal government does not want to legalize drugs

This article has been copied from the original on General Discussion at the request of RainDog
The original thread
http://www.democraticunderground.com/10022894797

The large banks make a lot of money, laundering drugs money cash.
The recent case of HSBC large scale drug money laundering
http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213
Just about all of the big banks are heavily involved in money laundering - it's endemic.

The CIA make a lot of money trafficking drugs to fund black-ops.
The scenario of Iran Contra whereby arms were shipped to right wing rebel groups, paid for with drugs, and the drugs smuggled into the US, continues.
The CIA is one of the largest drug importers into the US and has been since at least Vietnam - see Appendix 1.
The CIA launder this drug money cash via client banks (see above).

It provides a useful mechanism to meddle into the affairs of other countries. E.G. Colombia and from there Venezuela and Ecuador.

It provides an excuse for heavy handed domestic intervention by the government and draconian laws.
It keeps street violence and general crime levels high. Very useful to maintain and exacerbate a scared population.

It creates a lot of slush money for politicians.
E.G. campaign donations from the prison industry.

The top 5 lobby groups (the heaviest spenders) to keep drugs illegal are :-

The pharmaceutical industry - they don't like competition.
They also don't want a "happier" population. Miserable and stressed out people are more susceptible to illnesses.
Drastically reducing the levels of crime is counter-productive for prescription drug sales. There would be far fewer people stressed out because a loved one/friend had been shot, or their house or car had been burglarized.
There would also be far fewer stressed out people if the streets and schools became much safer, because all the drugs gangs had been removed.
Etc. You can see how higher crime levels increases the demand for prescription drugs in all sorts of ways.

The alcohol industry (see above)

The prison industry - there are over 1 million people in jail for non violent drugs related crimes.
The prison population and the profits of the prison industry would be devastated if drugs were ever decriminalised/legalized

The prison guards union. See above. Less prisoners would mean less prison guards are required.

The police union. Less police officers would be required if the crime levels went down and they didn't spend lots of their time pursuing drugs crime.

The Federal government does not care that it costs the taxpayer $200bn a year with the current system (see 3). This is not a priority.

A number of senior policemen have spoken out against drug prohibition, due to the violence, crime and corruption it engenders.

A retired Police Captain demolishes the "war on drugs" and prohibition
&feature=youtu.be

http://www.leap.cc/

Appendices and References

1. A short history of the post WW2 drugs trade
After WW2 the major source of drugs was the Golden Triangle and the drug of choice was opium/heroin.

Indo China were French/ex French colonies.
It was little wonder that Marseilles became the drugs capital of Europe.
The movie "The French Connection" starring Gene Hackman is founded upon real history and the historical facts of how France was involved in the global drugs trade.

When the French gave up on Indo China in the 50's, America and the CIA moved in.
The CIA trafficked drugs out of Laos and Vietnam.

When America lost the Vietnam war and were kicked out of Indo China, a new source of drugs had to be found.

Colombia and Central America became America's new source of drugs, the drug of choice became cocaine.

http://www.globalresearch.ca/the-real-drug-lords-a-brief-history-of-cia-involvement-in-the-drug-trade/10013

Turkey's role in the opium trade.
http://www.infowars.com/u-s-wars-and-the-opium-trade/ (I know the source site is unreliable, but this is one of the few good articles in the last few years.)

In Afghanistan now, President Karzai and his family are heavily involved in the opium trade.
http://www.nytimes.com/2009/10/28/world/asia/28intel.html?pagewanted=all&_r=0

Pictures & stories of Marines guarding the poppy fields in Afghanistan
https://www.google.co.uk/#gs_rn=12&gs_ri=psy-ab&tok=LOAys4AebUgExUYNej_MMg&cp=18&gs_id=22&xhr=t&q=Marines+guarding+poppy+fields&es_nrs=true&pf=p&output=search&sclient=psy-ab&oq=Marines+guarding+p&gs_l=&pbx=1&bav=on.2,or.r_cp.r_qf.&bvm=bv.47008514,d.d2k&fp=d3d85859a5844b3f&biw=1024&bih=587

Opium production in Afghanistan fell by 90% after the Taliban banned it in circa 2000.
It is now back up to pre invasion levels.
http://www.dailymail.co.uk/news/article-2102158/Heroin-production-Afghanistan-RISEN-61.html

There is a whole web of intrigue around the CIA, HW Bush, the drugs trade and large scale money laundering.

2. The following articles are instructive in putting the drugs trade and drugs money into perspective.
Narco dollars for Beginners


Okay, let's start at ground zero. It is 1947, and World War II is over. America is ready to go back to work to build the corporate economy. We are in New Orleans on the docks.

Two boats pull into the docks. The first boat is full of a white agricultural product grown in Latin America called sugar. The owner of the cargo, lets call him Sam, sells his boat load of white agricultural substance to the sugar wholesaler on the docks for how much money?

Ok, so let's say that Sam sells his entire boatload of sugar to the sugar wholesaler on the docks for X dollars.

Now, after Sam pays his workers and all his costs of growing and transporting the sugar, and after he and his wife spend the weekend in New Orleans and he pays himself a bonus and buys some new harvest equipment and pays his taxes, how much cash does he have left to deposit into his bank account? Or, another way of saying this is: What is Sam's net cash margin on his sugar business?

Well, it depends on how lucky and hard working and smart Sam is, but let's say that Sam has worked his proverbial you know what off and he makes around 5-10 percent. Sam the sugar man has a 5-10 percent cash profit margin. Let's call Sam's margin S for slim or SLIM PERCENTAGE.

Back on the docks, the second boat---an exact replica of the boat carrying Sam's sugar---is a boat carrying Dave's white agricultural product called drugs. In those days this was more likely to be heroin, these days more likely to be cocaine. Whatever the precise species, the planting, harvesting and production of this white agricultural substance, Dave's drugs, are remarkably like Sam's sugar.

Ok, so if Sam the sugar man sold his sugar to the sugar wholesaler for X dollars, how much will Dave the drug man sell his drugs to the drug wholesaler for? Well, where Sam is getting pennies, Dave is getting bills. If Sam had sales of X dollars, let say that Dave had sales of 50-100 times X. Dave may carry the same amount of white stuff in a boat but from a financial point of view, Dave the drug man has a lot more "sales per boat" than Sam the sugar man.

Now, after Dave pays his workers and all his costs of growing and transporting the drugs, and after he and his wife spend the weekend in New Orleans and he pays himself a bonus and buys some new harvest and radar equipment and spends what he needs on bribes and bonuses to a few enforcement and intelligence operatives and retainers to his several law firms, how much cash does he have left to deposit into his bank account? Or, another way of saying this is what is Dave's net cash margin on his drug business?

It's also going to be a multiple of Sam's margin, right? Maybe it will be 20 percent or 30 percent or more? Let's call it B for Big, or BIG PERCENTAGE. Dave the drug man has a much bigger "cash profit per boat" than Sam the sugar man. Part of that is, of course, once Dave has set up his money laundering schemes, even after a 4-10 percent take for the money laundering fees, it's fair to say his tax rate of 0 percent is lower than Sam's tax rate. While it is expensive to set up all the many schemes Dave might use to launder his money, once you do it you can save a lot avoiding some or all of the IRS's take.

Look at your estimate of Sam and Dave's sales and profits. Now answer for yourself the following questions.

Who is going to get laid more, Sam or Dave?

Who is going to be more popular with the local bankers, Sam or Dave?

Who is going to have a bigger stock market portfolio with a large investment house, Sam or Dave?

Who is going to donate more money to political campaigns, Sam or Dave?

Whose wife is going to be bigger in the local charities, Sam or Dave's?

Whose companies will have more prestigous law firms on retainer, Sam or Dave's?

Who is going to buy the other's company first, Sam or Dave? Is Dave the drug man going to buy Sam the sugar man's company, or is Sam the sugar man going to buy Dave the drug man's company?

When they want to buy the other's company, will the bankers, lawyers and investment houses and politicians back Sam the sugar man or Dave the drug man?

Whose son or grandson has a better chance of getting into Harvard or getting a job offer at Goldman Sachs, Sam or Dave's?

Don't listen to me. And don't listen to Peter Jennings, Dan Rather or Tom Brokaw. Who do you think pays their salaries? Who owns the companies they work for? Sam or Dave?

Don't listen to anyone else. Think about the numbers and listen to your heart. What do you believe?

There is very little about how the money works on the drug trade that you cannot know for yourself by coming to grips with the economics over a fifty year period of Sam and Dave and their boat loads of white agricultural substance. It is the magic of compound interest.

As one of my former partners used to say, "Cash flow is more important than your mother."

Continue reading at :-


http://www.drugwar.com/fittsnarco1.shtm

The Narco money map and Politics


What are the four states with the largest market share in illegal narcotics trafficking? Draw a map if you want and shade them in on your map.

Yup. You got it.

New York, California, Texas and Florida.

It makes sense. Those are the biggest states. They have big coastal areas and borders and big ports. It would make sense that the population would grow in the big states where the trade and business flow grows. If you check back to Part I of "Narco Dollars for Dummies", we described two businesses. One was Sam's sugar business that had a SLIM PERCENTAGE profit. The other was Dave's drug business that had a BIG PERCENTAGE profit. It would make sense that these four states would be real big in both Sam's sugar business and Dave's drug businesses.

OK. Now. What are the four states with the biggest business in money laundering of narco profits and other profits of organized crime?

Not surprising? Same four states. They are all known as banking power places.

New York, California, Texas and Florida.

What's next? What are the four states with the biggest business in taking the laundered narco profits and using them to deposit money in a bank, or to buy another company, or to start a new company, or just buy stock in the stock market? That's what I call the reinvestment business.

Same four, right? New York, California, Texas and Florida.

Who were the governors of these four states in 1996?

Well, let's see. Jeb Bush was the governor of Florida. Governor Jeb was the son of George H. W. Bush, the former head of an oil company in Texas and Mexico and the former head of the CIA and the former head of the various drug enforcement efforts as Vice President and President. Then George W. Bush, also the son of George H. W. Bush, was the governor of Texas. So the governors of two of the largest narco dollar market share states just happen to be the sons of the former chief of the secret police.

Do you think it is possible to become the governor of a state with the support of the SLIM PERCENTAGE profit businesses and the opposition of the BIG PERCENTAGE profit businesses, particularly after the BIG PRECENTAGE profits have bought up all the SLIM PERCENTAGE profit businesses?

What about president?

Of course, George W. is President today fueled by the single most successful campaign fundraising in the history of Western civilization. Now do you know why Hillary Clinton wanted to be a Senator from New York? Now do you know why Andrew Cuomo wants to be New York governor and is reported to be doing polls to see if people associate him with the Mafia and organized crime?

When you think about it, the President would need to win the majority of the people who donate from the SLIM PERCENTAGE profit businesses but control the reinvestment of the BIG PERCENTAGE profit industry cash flow to win. The competition for the support of the people who control the reinvestment from the BIG PERCENTAGE profit business cash flow in the biggest states would be fierce.

According to the Center for Responsive Politics analysis of the 2000 elections, donors in California, New York, the District of Colombia Metro Area (which is full of lawyers and lobbyists who represent all the other states), Texas and Florida contributed $666.8 million, or approximately 47 percent of a total of $1.427 billion in donations.

Continue reading at :-
http://www.drugwar.com/fittsnarco2.shtm



Drugs As Currency
One of challenges of doing the numbers on the narcotics business is that narcotics are not always a commodity -- sometimes narcotics are a currency used to pay for other things.

The arms industry sometimes markets to third world countries, or groups such as terrorists, who cannot pay with cash, but can pay with drugs. So, for example, it is not unusual to see arms-drugs transshipment operations, in which payment for arms is taken with drugs and then the drugs retailed in the US to facilitate the arms trading and profits.

A case in point is the Iran-Contra operation at Mena, Arkansas. It has been alleged that Oliver North and the White House (National Security Council) were dealing drugs through Mena not to make money, but to facilitate arms shipments. Mena has received attention as a result of its alleged financial contribution to Bill and Hillary Clinton's rise to national prominence.

You also see the arms-drugs relationship as you estimate how the money works on the private profits from various taxpayer funded wars. Vietnam, Kosovo, Plan Colombia, Afghanistan, what do they all have in common? Drugs, oil and gas, arms. Add gold, currency and bank market share and you have the top of my checklist for understanding how the money works on any war or "low intensity conflict" around the globe.

Many of the members of our global leadership were trained in wartime narcotics trafficking in Asia during WWII. George H. W. Bush and his generation watched our ally Chang Kai Shek finance his army and covert operations with opium. I am told that the Flying Tigers were the model that taught Air America how to fly dope.

If you trace back the history of the family and family networks of America's leaders and numerous other leaders around the world, what you will find is that narcotics and arms trafficking are a multigenerational theme that has criss-crossed through Asia, North America, Europe, Latin America and Eurasia and back through the City of London and Wall Street to the great pools of financial capital. Many a great American and British fortune got going in the Chinese opium trade.

One of the benefits of learning how narco dollars work is that it will help you sort through the money laundering and insider trading news on the War on Terrorism. Terrorism and narcotics trafficking often get linked through narcotics as currency. Terrorists need guns. Narco dollars need private protection and covert operations.

In Defense of the American Drug Lords
It's 1947. You want to make sure that America wins in the great game of globalization. The winner will be the country that accumulates the largest pool of capital to finance its corporations and investment in new technology. That is a problem because Americans vote for leaders who help them spend, not save. No matter how hard Sam the sugar man works and no matter how much he saves, how much capital can be pooled at SLIM PERCENTAGE? It is fair to say it is not enough to beat the investment network that can pool capital at BIG PRECENTAGE growth rates. (See Part I for the story of Sam and Dave).

Indeed, what a history of narcotics trafficking and piracy and various other forms of organized crime over the last five hundred years show is that our leaders have been in a double bind for centuries. The only thing more dangerous than getting caught doing organized crime, is not being in control of the reinvested cash flows from it. This is why monarchs played footsie with pirates in Elizabethan times and no doubt have been doing so ever since.

After taxation, organized crime is a society's way of forming lots of pools of low cost cash capital. Organized crime is a banking and venture capital business.

So the reality is that if you want to control the cash flow and capital that controls the overworld, you've got to control the cash flows getting generated by the underworld. Indeed, you've got to have an underworld. If it does not exist, you need to outlaw some things to get one going.

Here is the bottom line on how the money works on narco dollars. Unless Sam switches to dope, Dave will win his wife, his mistress, his banker, buy his company, buy his Congressman and be the star at the local charities. Everyone will admire and pay attention to Dave.

It's the power of compound interest.

It's 1947. If you don't do it, you will be the loser. What would you do?



Continue reading at:-

http://www.drugwar.com/fittsnarco3.shtm

3. How to reduce the number of hard drug addicts; the level of general corruption, violence and crime; and save $200bn a year of taxpayers money. Legalize drugs.

Legalizing drugs would :-

Save taxpayers $200bn a year
reduce criminality
reduce corruption
reduce policing costs
reduce the prison population
reduce the court backlog
reduce the number of hard drug addicts
make the streets much safer
improve social mobility
reduce the funding to the Taliban
reduce illegal immigration from Mexico


The estimated savings from legalizing drugs and taxing them as per alcohol and tobacco are $195bn+ a year. See below.

1. Social Problems and the scale of drug use

So you cry, legalizing drugs will dramatically increase drug usage. But it will actually reduce it.
Portugal decriminalized ABSOLUTELY ALL drugs in 2001. Combined with a treatment program, the number of hard drug addicts has halved in 10 years.
Also the cachet of doing something naughty amongst the young is removed by legalization.
So instead of jailing 100,000 criminals and having 80,000 hard drug addicts , Portugal now treats 40,000 hard drug addicts, with 100,000 less in prison.
http://www.forbes.com/sites/erikkain/2011/07/05/ten-years-after-decriminalization-drug-abuse-down-by-half-in-portugal/

Social problems did not decrease when prohibition of alcohol was introduced. They increased, principally due to large scale crime cartels and the endemic corruption they engendered with the amount of money generated from illegal alcohol.
Social problems did not increase when prohibition of alcohol was repealed. They went down for the same reasons they had gone up in the first place.
I have seen no evidence that the number of alcoholics went down with prohibition. If you are going to become an alcoholic, you probably are going to become an alcoholic whatever the law says.

There is no war on drugs going on.
There is a campaign to promote large scale drug use and large scale criminal activity and corruption going on.
The media is almost 100% complicit in feeding false information to the general public in the face of overwhelming evidence to the contrary, so that public ignorance of the facts remain in place and the current political policies remain in place.

2. Costs of the "war" on drugs / Benefits of Ending It

2.1 Policing costs
In 2009 the Federal Goverrnment spent $22bn on the "war" on drugs.
In 1998 States spent $30bn. This could probably be doubled in today's dollars.
Total $82bn
Less a small amount, e.g. a similar cost to that currently incurred where alcohol is legal. No data is available, let's be generous and take off $10bn.
Revised total $72bn.
http://civilliberty.about.com/od/drugpolicy/p/War-on-Drugs-Facts.htm

2.2 Jail population
55%+ of the Federal and 21% of State's prison populations are jailed for drugs related crimes.
These are official figures and will not include some other crimes for which a link to drugs is more obscure, e.g. a significant number of additional homicides and other drug gang violence. So it is an under estimate.
It also does not included people convicted of property crimes to pay for their habit. E.G. Burglary, street thefts, car crime etc.
Drugs RELATED crime is far higher than the DOJ numbers. More realistic estimates are that 70 to 80% of inmates are in jail for drugs RELATED crime.

But we will just use the under reporting DOJ numbers for these costs.

Assuming a 90% reduction in drug related crime, legalization would save $11 to $15bn just in the costs of jails.
It costs $22,000 to $30,000 to jail each prisoner per year.
The US prison population was 1.5 million a few years ago.

2.3. Taxes
A significant revenue stream would be generated if drugs were taxed like alcohol or tobacco and distributed via licensed premises.
Estimates vary wildly, after all it is a black market.
Assuming the legal price was roughly the same as the current street price.

Marijuana $40bn to $100bn
Cocaine and Heroin $30bn+
All other drugs around $5bn
http://www.businessweek.com/debateroom/archives/2010/03/legalize_mariju.html

I don't know how the $32bn figure for cocaine/heroin was arrived at. It might not be the full difference between production/transportation cost and the street price.

2.4 Intangible / unquantifiable benefits

A significant part of street crime, muggings, robberies, burglaries, auto crime is committed to pay for hard drugs.
In addition to this the future cost of lower earnings for those criminalized by low level drug offenses and welfare payments for those unemployed or in poverty.
Less the cost of treatment programs for drug addicts.
Crime careers plus victims of crime :- Estimate $12bn+

2.5 International Relations
Most of the Taliban's income comes from the illegal heroin trade. This could be severely curtailed if Europe followed America.

Latin America has started calling for the end to the war on drugs.
The majority are still against it, they remember Noriega of course.
http://www.guardian.co.uk/world/2012/apr/07/war-drugs-latin-american-leaders
http://www.aljazeera.com/programmes/insidestoryamericas/2012/04/201241773745976367.html

Mexico had 50,000 drug related homicides last year. Mexico would certainly be far more stable without the drug cartels smuggling drugs into the US.
Illegal immigration from Mexico would certainly be reduced if parts of Mexico were no longer an anarchic drugs battleground.

International Relations and International Stability would be improved by legalizing drugs.


4. The current major drug routes and the amounts smuggled

http://www.phantomreport.com/narcotic-superhighways-the-top-5-routes-for-drug-trafficking?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+PhantomReport+(Phantom+Report)

5. The top 5 special interest groups lobbying to keep marijuana illegal
http://truth-out.org/news/item/8854-the-top-five-special-interest-groups-lobbying-to-keep-marijuana-illegal